Leaving a Meaningful Legacy

What are you leaving behind? This is a question that all too many of us fail to address adequately before it's too late. It's not just a question about money, but about the entire legacy that you want to pass on to future generations - those in your family and even society as a whole.

When mapping out your legacy plan, there are many things to think about: your current assets and debts, tax implications, income, expenses, and the list goes on. While it might seem like a lot to sort through-especially once you tack on the emotional aspect of planning for your own end of life-the reward of proper planning is knowing you've done all you can to enhance the well being of your beneficiaries. Here are a few issues to consider:

Taxes

The federal estate tax has been eliminated for individuals who pass away in 2010 (barring action from Congress to reverse the situation), but this is just a temporary change to the law. The estate tax is scheduled to reappear by 2011, possibly affecting estates as small as $1 million (compared to the previous law with a $3.5 million tax exemption level). Even now, estate and inheritance taxes may still affect many on a state level.

In addition, beneficiaries may not escape income taxes. Those who inherit a traditional IRA, for example, will have to pay applicable income tax on distributions. An alternative is to convert a traditional IRA to a Roth IRA (which will require one to pay income tax currently), which can allow beneficiaries to enjoy tax-free distributions for years to come.

Managing the estate

Will anybody manage your money with the care and conviction that you practice today? Not likely, unless you make your wishes clear. A will allows you to specify who will administer your estate, and how your property will be distributed. If you have minor children, a will can also identify to whom their guardianship will be transferred. Be sure to put a comprehensive will in place and revisit it on a routine basis, or whenever major life events occur.

Depending on your situation, you may also want to consider setting up a trust or other type of ownership arrangement to provide some structure to the management and disposition of assets.

Careful planning is all the more crucial for small business owners who need to determine the future of their company, including who will take charge and the financial implications of business succession. If your firm provides products or services that others have come to rely on, it is important to plan ahead to maintain normal business activity in your absence.

Protection

Keeping assets protected from potential creditors or the impact of future lawsuits is another important aspect of legacy planning. In some states IRAs, annuities and insurance can be useful tools to help minimize the potential exposure. This is an issue regardless of the size of the estate but should only be done in consultation with your legal advisor.

Organization

One of the greatest gifts you can leave behind is a set of well-organized records. Good documentation of all assets and debts, where everything important can be found and key contact names will go a long way toward the proper disposition of your estate. You can also leave a letter, separate from a formal will, outlining specific wishes regarding matters like organ donations or the conduct of your funeral, as well as how specific items you own should be distributed to others-but the rules on this vary state to state.

Seek the advice of tax, legal and financial advisors to protect and ensure the legacy you've been working to build.

###

Harvey C. Sacks, J.D. | Senior Financial Advisor | Business Financial Advisor

3220 Creamery Rd | New Hope, PA 18938

Office: 215.230.9198 | Fax: 215.230.9498| Mobile: 215.802.2509 | harvey.c.sacks@ampf.com

84 Park Ave Suite G-103C | Flemington, NJ 08822

Office:908.788.2999 | Fax: 908.788.2850

Learn more at www.ameripriseadvisors.com/harvey.c.sacks

CA Insurance License #370456

We shape financial solutions for a lifetime®

An Ameriprise Financial Franchise. Ameriprise Financial Services, Inc. offers financial advisory services, investments, insurance and annuity products. RiverSource® and Columbia ManagementSM products are offered by affiliates of Ameriprise Financial Services, Inc., Member FINRA and SIPC.

Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.

File #101346

For more information, contact:

Harvey C. Sacks, JD, Financial Advisor, Ameriprise Financial Services, Inc.
84 Park Ave Suite G-103C
Flemington, NJ 08822
908 788 2999